Armstrong Asset Management has agreed to commit up to US$40 million in equity to fund the construction of wind and solar projects in a number of Southeast Asia countries. This will be in partnership with The Blue Circle, a vertically integrated renewable energy developer operating in the Mekong Region (Vietnam, Thailand and Cambodia) in which Armstrong will also take a minority equity stake.
Andrew Affleck, Managing Partner of Armstrong Asset Management, said he is excited by the opportunity to work with Olivier Duguet, CEO of the Singapore-based The Blue Circle Pte Ltd.
"Over the last 15 years, Olivier has achieved a successful track record of working with Private Equity in developing, constructing and selling a renewable energy portfolio in Europe, which included 115MW of operational and 850MW of development projects. With Armstrong's local experience and established regional network, we aim to replicate that success here in Southeast Asia together with The Blue Circle."
Currently the developer has a pipeline of over 600 MW renewable energy projects under evaluation or negotiation in the Mekong Region.
Olivier Duguet, on the announcement of the new funding partnership, said:
"Having an institutional investor like Armstrong as a shareholder and project equity partner, with their extensive operational experience in Southeast Asia and specialization in renewable energy, will certainly accelerate the growth of The Blue Circle portfolio and strengthen our financing ability."
The agreement between the two Singapore based companies means that The Blue Circle will also benefit from Seed Capital Assistance Facility (SCAF) funding. An initiative by UNEP, ADB and GEF, SCAF is designed to help project developers overcome some of the challenges of Greenfield project development, such as high due diligence or transaction costs.
Armstrong closed its Clean Energy Fund when it reached US164 million last November. Prior to the latest deal, it has made two investments from the fund: a capital commitment of up to US$30 million to Annex Power for solar PV and biogas projects in Thailand, Indonesia and the Philippines, and an equity stake in Symbior Elements to develop a portfolio of solar generation in Central and Northeast Thailand.
Last month, Armstrong and Mandiri Investment Management entered into a co-investment arrangement to work together to invest in renewable energy projects in Indonesia. They will start their collaboration by focusing on the emerging hydro sector in Indonesia, in particular mini hydro-electric power plants.
Armstrong Asset Management is an independent asset manager, based in Singapore, focused on the clean energy sector in Southeast Asia's emerging markets. Armstrong invests in small-scale infrastructure projects and achieved a final close on its debut clean energy fund on US$164m in November 2013. Operating with a multidisciplinary team of investment professionals, all of whom possess deep sector knowledge and a collective 80 years of Southeast Asia operating experience, Armstrong integrates strict environmental, social and governance compliance into its investment process to deliver tangible benefits and reduce risks for all of its stakeholders.
The Blue Circle focuses on developing wind and solar energy projects in Thailand, Vietnam and Cambodia. The Singapore based company looks to bridge the gap in project development in the Mekong Region by bringing international project development experience, financial expertise and capabilities together with local market understanding. Its growth strategy is twofold: through the development of its own projects and through acquisition or partnership with local developers. By being vertically integrated, The Blue Circle can identify Greenfield sites; pursue project development milestones up until financing and operating of the generating assets.